It is not unusual for new attorneys out of law school to have well upwards of $100,000 in student loan debt. And while practicing law can provide an excellent quality of life, it is difficult for attorneys fresh out of law school to make ends meet, never mind make progress toward life's financial goals, such as buying a home.
Luckily, some home lenders out there have created lawyer mortgage programs to help practicing attorneys afford to buy their dream homes earlier in life.
This article will explore a number of these homeownership programs.
What are attorney mortgages?
Lawyer, or attorney, mortgages are special loan programs offered by home lenders that come with increased flexibilities and privileges not given to normal home borrowers. Attorney loans oftentimes carry either zero or very low-down payments, meaning that you may be able to finance up to 100% of the purchase price of your home.
These loans oftentimes come with other perks, such as no private mortgage insurance requirements and student loan exclusions from debt-to-income ratio calculations.
It's not too difficult to figure out why lenders do this. Given that attorneys are oftentimes highly compensated individuals, especially those working in corporate law, banks try to build relationships early in these individuals' careers. That way, later on, when they have more investable assets and wealth, they maybe more likely to choose their bank for wealth management of other high net worth services.
Related: These are the best side hustles for attorneys
Lenders offering lawyer mortgages
Not all lenders offering these programs refer to them as attorney mortgages. Oftentimes, they are marketed as "professional mortgages." If lenders offer professional loans and lawyers are eligible for them, we've also included them on our list here.
1. City National Bank
City National Bank offers a professional mortgage program that is open to lawyers in every state except for Florida and Texas. The program carries slightly more modest financing requirements than some other lenders on this list, requiring buyers to put down 3% on loans up to $650,000. As we'll get into, we think this can be a good thing.
Your term options will be:
15 year fixed
30 year fixed
2. Flagstar Bank
Flagstar Bank offers a program specifically for attorneys to take advantage of. Home buyers can borrow up to $1 million without any down payment as long as they have a credit score of at least 720. Those looking to buy even more house can borrow up to $1.5 million, so long as they have a credit score of 700 and have a 5% down payment.
Other features of Flagstar's professional program include:
No PMI requirement
No prepayment penalties
The ability to start up to 60 days ahead of your job start date
An interesting aspect of this program is that you'll need to take an adjustable rate mortgage (ARM) to participate. At this time, your term options are 10/1, 7/1, and 5/1.
Flagstar Bank opens this program up to home buyers nationwide.
3. Cadence Bank
Cadence Bank, based in Atlanta, offers a Early Professional Loan Program that may provide you with up to 100% financing, up to $1.5 million, to:
To be eligible, you'll need to be less than 5 years removed from graduation or applicable licensure. Cadence's program comes complete with no PMI requirements, as well as fixed and adjustable rate loan options.
Cadence lends in Alabama, Texas, Mississippi, Florida, Georgia, and Tennessee.
Univest also has a professional mortgage program, available to lawyers and other professionals. They offer 95% financing on loan amounts up to $850,000, and 90% financing up to $1 million.
Univest will exclude your student loan debt from your debt-to-income ratio used to qualify you for your mortgage, and you may qualify for a mortgage based on a job offer for a role you're set to begin at some point in the future.
Univest offers loans in Pennsylvania, New Jersey, Delaware, and Ohio.
5. UMB Bank
UMB Bank, available to home buyers in Colorado, Arizona, Texas, and Missouri, offers 100% financing up to $1 million across fixed rate and ARM loans. Those that want to buy more house will be able to, though it may require a down payment.
The maximum loan amount is $2 million with a 10% down payment.
Other than that, there is not a ton of information regarding UMB's professional mortgage program online, and interested individuals are invited to reach out to a loan officer.
Is a professional lawyer mortgage your best option?
Some of the "perks" made available by this program are awesome, but you'll want to make sure that you're not stressing yourself financially unnecessarily. If you're an attorney making $100,000 out of law school, it may not make sense to buy so much house so soon, especially if you are unsure as to what your future earning potential looks like.
And while these perks feel exactly like benefits, the truth is they are going to leave you with higher monthly mortgage payments, payments which, when combined with your student loan payments, could leave you with little or no disposable income to save for retirement, go out to eat, and travel.
You'll either want to borrow less money than any of these programs may allow you to or see if you can qualify for a conventional mortgage, especially if you have a sizable down payment and will avoid PMI anyway.
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